Sensex ends 205 points higher

Sensex ended its seven-day losing streak to register a gain of 205 points after the Reserve Bank of India Governor, Raghuram Rajan, on Wednesday said the central bank is comfortable with core inflation and highlighted the Government measures to narrow current account deficit.

Sensex opened on a strong note at 20,351 against the previous close of 20,194. It hit the day’s high of 20,569 and low of 20,348 before closing at 20,399.

The NSE Nifty gained 67 points to 6,056.

Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio, said sentiment was boosted by positive global cues and US Fed’s statements indicating optimism in taking all actions needed to curb financial crisis.

Back home too, RBI Governor gave positive remarks over containing currency movement as well as CAD in near future, said Saraswat.

ICICI Bank, Tata Motors, Axis Bank and HDFC Bank were some of the major gainers.

Among the sectoral indices, auto, banking and realty were major gainers, up by over 2 per ent each, followed by Capital Goods, Power and Metal, up by over one per cent each. IT and Healthcare were marginally in negative.

Tata Power Company rose one per cent to Rs 79 after the company reported consolidated net profit of Rs 75 crore in the September quarter against net loss of Rs 84 crore. The Q2 result was announced during trading hours today.

Major gainers include Suzlon Energy (10%), Max India (7%), Axis Bank (7%), IRB Infra (6%), Adani Entertainment (6%), Prestige Estates (6%), YES Bank (6%), Tata Motors (6%) and GMR Infra (6%).

Losers were Coal India (-4%), Ashok Leyland (-3%), Ramco Cement (2%) and Cipla (-2%).

Reliance Communications soars on reporting stellar Q2 numbers

Reliance Communications is currently trading at Rs. 136.90, up by 4.55 points or 3.36% from its previous closing of Rs. 132.35 on the BSE.

The scrip opened at Rs. 134.20 and has touched a high and low of Rs. 138.90 and Rs. 134.20 respectively. So far 7, 57,000 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 5 has touched a 52 week high of Rs. 164.45 on 20-Sep-2013 and a 52 week low of Rs. 50.25 on 26-Mar-2013.

Last one week high and low of the scrip stood at Rs. 148.00 and Rs. 128.05 respectively. The current market cap of the company is Rs. 28,122 crore.

The promoters holding in the company stood at 67.80% while Institutions and Non-Institutions held 20.43% and 11.49% respectively. The company has reported 800% rise in its net profit at Rs 81 crore for the quarter as compared to Rs 9 crore for the same quarter in the previous year. Total income of the company has increased by 13.50% at Rs 3472 crore for quarter under review as compared to Rs 3059 crore for the quarter ended September 30, 2012.

On the consolidated basis, the group has registered a growth of 561.76% in net profit after taxes, minority interest and share of profit / (loss) of associates at Rs 675 crore as compared to Rs 102 crore in the same quarter previous year. Total income of the group rose 12.16% to Rs 5835 crore for quarter under review as against Rs 5202 crore in corresponding quarter previous year.

Karur Vysya Bank net profit falls 37.5%

Higher provisions towards depreciation on investments, bad loans and towards terminal benefits on wage revision have dragged Karur Vysya Bank's net profit during the second quarter by 37.5 per cent to Rs 82.89 crore.

The bank's net profit during the corresponding quarter of the previous fiscal stood at Rs 132.76 crore.

Its net interest income increased 4.41 per cent to Rs 298.38 crore (Rs 285.77 crore). Net interest margin fell to 2.51 per cent from 3.06 per cent.

Total business at the end of the first six months of the current fiscal, however, increased 27.3 per cent to Rs 75,281 crore (Rs 59,121 crore). Deposits were up 29.7 per cent and advances grew 24.27 per cent.

Both gross and net NPAs increased to 1.55 per cent (1.26 per cent) and 0.51 per cent (0.32 per cent), respectively.

Sensex surges 280 points on Yellen, Rajan comments

Indian markets continued their uptrend in the afternoon trading session on Thursday.

At 1.35 p.m., the 30-share BSE index Sensex was up 280.07 points (1.39 per cent) at 20,474.47 and the 50-share NSE index Nifty was up 85.4 points (1.43 per cent) at 6,075.

Among BSE sectoral indices, banking, capital goods, auto and realty indices led the charge and were up 2.92 per cent, 2.83 per cent, 2.57 per cent and 1.99 per cent.

Tata Motors, ICICI Bank, Tata Steel, L&T and M&M were the top five Sensex gainers, while the only losers were Coal India, Cipla, Sun Pharma, TCS and Bajaj Auto.

Volatility was down with the India Vix trading at 19.42, down 5.03 per cent.

Domestic markets followed global cues which turned positive on the statement by Janet Yellen, Vice Chairwoman of the US Federal Reserve, that the Fed would do whatever it takes to reduce the threat of another financial crisis.

The market sentiment was also propped up with the RBI Governor soothing investors’ nerves over rupee depreciation and pegging the Current Account Deficit (CAD) at around $56 billion.

However, with the Whole Sale Price Index (WPI) inflation at 7 per cent in October compared with 6.46 per cent in September this year, expectations that interest rates might ease may have to be tempered.

Janet Yellen in her testimony to the US Senate’s committee on banking said: “We have made progress in promoting a strong and stable financial system, but here, too, important work lies ahead. I am committed to using the Fed's supervisory and regulatory role to reduce the threat of another financial crisis. I believe that capital and liquidity rules and strong supervision are important tools for addressing the problem of financial institutions that are regarded as "too big to fail'' Overall, the Federal Reserve has sharpened its focus on financial stability and is taking that goal into consideration when carrying out its responsibilities for monetary policy. I support these developments and pledge, if confirmed, to continue them.”

Asian stocks bounced from six-week lows on Thursday after Federal Reserve Chairman nominee Janet Yellen signalled that the stimulus will be maintained until the US economy improves.

Japan's Nikkei surged 309.25 points or 2.12 per cent to 14,876.40, Hong Kong's Hang Seng jumped 192.78 points or 0.86 per cent to 22,656.60 and Australia's S&P/ASX 200 climbed 36.25 points or 0.68 per cent to 5,355.43.

Cisco quarterly income falls

Cisco posted a drop in first-quarter net earnings on Wednesday as revenue at the networking equipment company grew less than expected.

The Silicon Valley company, which is facing increased competition from competitors such as China’s Huawei, said its profits dropped 5 per cent to $2 billion from $2.09 billion in the year-ago quarter. Revenue grew 2 per cent to $12.09 billion.

In a conference call, Cisco said that sales grew less than expected due to weak demand in emerging markets, China, the United States and southern Europe. The company predicted a weaker-than-expected outlook for its second quarter, sending shares down some 10 per cent in after-hours trading.

“While our revenue growth was below our expectation, our financials are strong, our strategy is strong, and our innovation engine is executing extremely well,” Cisco chief executive John Chambers said.

“We remain confident in our long-term goal to be the number-one IT company in the world and help our customers solve their biggest business problems.”

October WPI inflation at 7%

Build up inflation rate in the financial year so far was 6.00% compared to a build up rate of 4.66% in the corresponding period of the previous year.

The annual rate of inflation, based on monthly WPI, stood at 7.00% (provisional) for the month of October, 2013 (over October, 2012) as compared to 6.46% (provisional) for the previous month and 7.32% during the corresponding month of the previous year.
Build up inflation rate in the financial year so far was 6.00% compared to a build up rate of 4.66% in the corresponding period of the previous year.

Inflation for important commodities / commodity groups is indicated in Annex-1 and Annex-II.
The movement of the index for the various commodity groups is summarized below:-

PRIMARY ARTICLES (Weight 20.12%)

The index for this major group remained unchanged at its previous month level of 251.6 (provisional). The groups and items which showed variations during the month are as follows:-

The index for ‘Food Articles’ group declined by 0.4 percent to 251.4 (provisional) from 252.3 (provisional) for the previous month due to lower price of ragi and maize (5% each), tea (4%) and poultry chicken, fruits & vegetables and fish-marine (3% each).  However, the price of fish-inland (8%), moong (5%), coffee (3%), condiments & spices, egg, wheat, urad and pork (2% each) and rice, mutton, beef & buffalo meat, barley and arhar   (1% each) moved up.

The index for ‘Non-Food Articles’ group declined by 0.7 percent to 212.3 (provisional) from 213.7 (provisional) for the previous month due to lower price of guar seed (16%), logs & timber (13%), raw rubber (11%), sunflower (4%),      raw cotton (3%), castor seed (2%) and soyabean, gingelly seed and linseed (1% each).  However, the price of      copra (coconut) (12%), raw jute (6%), groundnut seed (5%), niger seed (2%) and coir fibre (1%) moved up.

The index for  ‘Minerals’ group rose by 3.3 percent to 363.7 (provisional) from 352.1 (provisional) for the previous month due to higher price of zinc concentrate and crude petroleum (8% each) and copper ore (3%).  However, the price of sillimanite (8%), iron ore (6%), phosphorite (2%) and chromite (1%) declined.

FUEL & POWER (Weight 14.91%)

The index for this major group rose by 0.9 percent to 209.4 (provisional) from 207.5  (provisional) for the previous month due to higher price of electricity (agricultural) (13%), electricity (industry) (10%), electricity (domestic)        (5%), electricity (commercial) and electricity (railway traction) (4% each), aviation turbine fuel (3%) and bitumen,      lubricants and kerosene (1% each).  However, the price of petrol (4%) and furnace oil (3%) declined.

MANUFACTURED PRODUCTS (Weight 64.97%)

The index for this major group rose by 0.4 percent to 151.6 (provisional) from 151.0 (provisional) for the previous month. The groups and items for which the index showed variations during the month are as follows:-

The index for ‘Food Products’ group declined by 0.1 percent to 169.8 (provisional) from 170.0 (provisional) for the previous month due to lower price of tea leaf (blended) (3%), tea dust (unblended) (2%) and tea dust (blended),     sugar, gur, sunflower oil and khandsari (1% each).  However, the price of processed prawn (4%), ghee, mixed spices, cotton seed oil, oil cakes and copra oil (1% each) moved up.
The index for ‘Beverages, Tobacco & Tobacco Products’ group rose by 0.9 percent to 182.9 (provisional) from 181.2 (provisional) for the previous month due to higher price of dried tobacco (9%), chewing tobacco (scented or not ) (4 %), imfl-blended (2%) and soft drinks & carbonated water and rectified spirit (1% each).

The index for ‘Textiles’ group rose by 1.0 percent to 139.7 (provisional) from 138.3 (provisional) for the previous month due to higher price of woollen textiles (3%) and tyre cord fabric, cotton yarn, jute sacking bag, man made fabric and man made fibre (1% each).  However, the price of gunny and hessian cloth (4%) declined.

The index for ‘Paper & Paper Products’ group rose by 1.1 percent to 142.3 (provisional) from 140.8 (provisional) for the previous month due to higher price of paper pulp, computer stationery and newspaper (3% each), printing and writing paper and corrugated sheet boxes (2% each) and paper cartons / boxes, paper rolls, cream laid woven paper,     paper for printing / poster and kraft paper & bags (1% each).

The index for ‘Leather & Leather Products’ group declined by 0.9 percent to 143.8 (provisional) from 145.1 (provisional) for the previous month due to lower price of leather footwear (1%).

The index for ‘Rubber & Plastic Products’ group rose by 0.5 percent to 146.6 (provisional) from 145.8 (provisional) for the previous month due to higher price of rubber products (2%) and tyres (1%).

The index for ‘Chemicals & Chemical Products’ group rose by 0.1 percent to 148.9 (provisional) from 148.7 (provisional) for the previous month due to higher price of washing powder, safety  matches/ match box, pesticides and pigment & pigment intermediates (2% each) and castor oil, basic organic chemicals, organic manure, hair / body oils and paints (1% each).  However, the price of synthetic resin (5%) and thermocol, rubber chemicals,     explosives, washing soap, distemper, dye & dye intermediates, non-cyclic compound and vitamins (1% each) declined.

The index for ‘Basic Metals, Alloys & Metal Products’ group rose by 0.6 percent to 164.1 (provisional) from 163.1 (provisional) for the previous month due to higher price of ferro chrome (5%), sheets (4%), silver (3%), steel castings (2%) and hrc, ferro manganese, melting scrap, pressure cooker, ferro silicon, furniture, crc and steel: pipes & tubes (1% each).  However, the price of wire rods and pipes/tubes/rods/strips (1% each) declined.

The index for ‘Machinery & Machine Tools’ group rose by 0.4 percent to 131.6 (provisional) from 131.1 (provisional) for the previous month due to higher price of battery dry cells (9%), electric motors (3%), chemical plant equipments, ups / stabilizer and air conditioner & refrigerators (2% each) and capacitors, batteries, t.v.sets and      electric switch gears (1% each).  However, the price of t.v. accessories (5%), conductor (3%) and fibre optic cable and lamps (2% each) declined.

The index for ‘Transport, Equipment & Parts’ group rose by 1.2 percent to 135.7 (provisional) from 134.1 (provisional) for the previous month due to higher price of auto rickshaw / tempo / matador (4%), motor cycle / scooter / moped, motor vehicles and railway  axle & wheel (2% each) and bi-cycles (1%).

FINAL INDEX FOR THE MONTH OF AUGUST, 2013 (BASE YEAR: 2004-05=100)
 
For the month of August, 2013, the final Wholesale Price Index for ‘All Commodities’ (Base: 2004-05=100) stood at 179.0 as compared to 177.5 (provisional) and annual rate of inflation based on final index stood at 6.99 percent as compared to 6.10 percent respectively  as reported on 16.09.2013.

Banking shares rally, Bank Nifty surges 3%

YES Bank, IndusInd Bank, Axis Bank, BOI, ICICI Bank, Canara Bank and PNB are up more than 3% each on the NSE.

Banking shares are trading higher by up to 5% in early morning deals after the Reserve Bank of India (RBI) Governor Raghuram Rajan, on Wednesday, said that the current account deficit (CAD) for this year would be about $56 billion, less than 3% of gross domestic product (GDP) and $32 billion less than last year. He felt that there was no fundamental reason for rupee volatility.

YES Bank, IndusInd Bank, Axis Bank, Union Bank of India, Bank of India, ICICI Bank, Canara Bank and Punjab National Bank are up more than 3% each on the National Stock Exchange (NSE).

The NSE banking share index Bank Nifty was up 2.8% compared to 1.45% rise in benchmark CNX Nifty at 0930 hours.


Meanwhile, the RBI said it will sell bonds worth Rs 8,000 crore next week under the open market operations (OMO) to inject liquidity in the system.

Natco Pharma rallies over 8% as US Court rejects stay request on Copaxone

Shares of Natco Pharma BSE 5.27 % surged higher in trade today after the US Supreme Court rejected rival TevaPharmaceutical's request for stay onCopaxone drug. 

Natco BSE 5.27 % Pharma is in the process of developing generic version of Copaxone and can launch it in May 2014 subject to the USFDA approval. 

Copaxone accounts for about 20 percent of sales and 50 per cent of Teva's profit. The company generated nearly $4 billion in sales from the drug. 

In July, the US Court of Appeals for the Federal Circuit issued a decision in a patent fight that pits Teva against two teams developing cheaper generic forms of Copaxone: one with Novartis BSE 0.77 % AG and Momenta Pharmaceuticals Inc; and another between Mylan Inc and Natco Pharma Ltd.

Investors shun corporate bonds due to high yields

Invest more in government bonds

With high yields making the corporate bond market unattractive, investors are now eyeing government bonds. The big investors including fund houses, insurers and banks, are not only investing more in government bonds, but are also exiting investments in the corporate bonds.

The yield on the 10-year 'AAA' rated public sector undertaking corporate bond rose 9.90% from 9.58% at the start of this quarter. 'AAA' rating indicated highest safety. While the yield on the 5-year bond rose to 9.93% from 9.44%. Though yields of government bonds may drop from current levels due to Open Market Operation purchase of government bonds next week, the impact may not be much for corporate bonds.

Dwijendra Srivastava, head of fixed income, Sundaram Mutual Fund said, "Investors are selling their holdings because yields are rising. Investors resorted to selling corporate bonds because the relative value is going down. There will be more of sellers in corporate bonds as compared with government bonds after the announcement of Open Market Operation (OMO) by Reserve Bank of India (RBI)"

RBI governor Raghuram Rajan said on Wednesday that the central bank will conduct an OMO on Monday for a notified amount of Rs 8,000 crore to comfort the temporary strain in liquidity. Government bond dealers have been waiting for an OMO because of government bond auctions being held every week in November for a notified amount of Rs 15,000 crore taking the total auction size for the month to Rs 75,000 crore. Investors prefer government bonds as they are more liquid compared with corporate bonds.

According to an issue arranger of corporate bonds, there is not much appetite as yields of corporate bonds continue to trade high. There is also a fear that few companies may be downgraded in a slowing economy due to which investors are exiting from their corporate bond holdings. This includes traders, fund houses, insurance companies as well as banks.

Insurance companies, on the other hand, also argue that there is an absence of corporate bond issuances, which has necessitated the need to invest in government securities.

Badrish Kulhalli, Fixed Income Fund Manager, HDFC Life Insurance explained that whatever sale of corporate bond was happening, was merely to rebalance the portfolio. “They are not reducing positions,” he added. However, Kulhalli explained that with the high cost of borrowing from the bond market, corporates themselves prefer to borrow from banks.

Market players also said that there are some rising concerns from investors about the bond issuers being downgraded by the rating agencies. Downplaying this fear, Kulhalli said that while there are concerns, this is primarily for those issuances rated below the top notch ones.

Here too, he said that the number of issuances were very low, in the range of one to two in a quarter. With yields shooting up, these numbers are expected to come down further.

ABB inaugurates two manufacturing plants for power products

Over Rs. 250 crore investment in new high-voltage switchgear and distribution transformer factories will expand offering and extend local production footprint.

ABB, the leading power and automation technology group, on Wednesday inaugurated two new facilities producing power products in India to coincide with the 50 year anniversary of the company’s extensive Vadodara manufacturing hub in the western state of Gujarat. 

The new units covering an area of about 15,000 square meters were built in 18 months at an investment of approximately Rs. 250 crore and are located in Savli, close to the Vadodara facility. The new manufacturing units will produce high-voltage switchgear and distribution transformers.

The high-voltage unit will produce gas-insulated switchgear (GIS) and PASS (plug and switch system) hybrid switchgear to serve growing demand in India and will also serve as an export hub. The new transformer factory will focus on the production of dry-type and oil immersed distribution transformers.

The new transformer factory will enhance the company’s offering in India and extend the distribution transformer range up to 10 megavolt amperes (MVA), 36 kilovolts (kV). 


ABB has global expertise in the design and manufacture of transformers for special requirements that optimize space and can withstand the most demanding conditions. Dry-type transformers help reduce environmental impact and can be deployed in environmentally challenging conditions. They enhance safety and are also well suited for indoor applications.

Corporation Bank surges on entering into MoU for providing finance against warehouse receipts

Corporation Bank is currently trading at Rs. 269.30, up by 4.50 points or 1.70% from its previous closing of Rs. 264.80 on the BSE.

The scrip opened at Rs. 268.00 and has touched a high and low of Rs. 273.50 and Rs. 268.00 respectively. So far 7147 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 494.85 on 07-Jan-2013 and a 52 week low of Rs. 239.55 on 04-Sep-2013.

Last one week high and low of the scrip stood at Rs. 315.00 and Rs. 263.20 respectively. The current market cap of the company is Rs. 4117 crore.

The promoters holding in the company stood at 59.82% while Institutions and Non-Institutions held 32.56% and 7.62% respectively.

Corporation Bank has entered into tie-up with Star Agri Warehousing and Collateral Management, Mumbai, for providing finance against warehouse receipts. Both the parties have inked a Memorandum of Understanding (MoU) for the same at the bank’s Corporate Office in Mangalore on November 12, 2013.

Banks are entering into tie-up arrangement with specialized warehousing and collateral management agencies wherein the pledge of negotiable warehouse receipt of the agencies with the banks facilitate farmers to get better agriculture credit facilities and prevent distress sale of the agricultural produce while mitigating risks of volatility in prices.

Star Agri Warehousing and Collateral Management has got its presence in more than 12 states, operating more than 200 warehouses across India with the total warehousing capacity of 10 Lakhs Metric Tonnes.

RBI to gradually taper dollar swap window; announces Rs 8,000 crore worth bond buyback

In an attempt to calm nerves over Rupee’s depreciation in the past few days, Reserve Bank of India’s governor, Raghuram Rajan, stated that though majority of dollar demand from the oil marketing companies was back in the market, but on the same time also underscored that it was in no rush to taper its dollars swap window to these companies.

Further providing relief, he cited that India’s Apex Bank would choose the most appropriate solution to settle dollar swaps with oil companies when the time comes. While, the governor cited the option of rolling over some portion of the oil company dollar swaps if market conditions were unstable, he also underscored that these companies could return the dollars borrowed under the swap facility in Rupee terms.  This meant that Oil Marketing Companies, without causing any disturbance to the forex markets could net off their transactions.

Additionally, referring to the recent decline in the value of rupee, Rajan pointed that there was no fundamental reason for volatility in the exchange rate. Also in attempt to shore-up currency, the governor highlighted that RBI estimates current account deficit (CAD) in 2013-14 to be much lower at $56 billion than the quantum projected earlier.  Although, the government projected the CAD in the current fiscal to stand at $70 billion, the same was revised downwards to $60 billion by Finance Minister P Chidambaram on back of declining gold imports and recovery in exports.

Besides, the governor also took a heart from the narrowing trade deficit numbers and slowing of core inflation, but he also expressed worries over high food inflation by terming it as “cause for worry for central bank”. Meanwhile, delighting the bond markets, the governor announced that central bank in order to ease liquidity in the system, would buy Rs 8,000 crore of bonds from the secondary market, under the central bank’s open market operations scheme.

Order win worth Rs 568 crore powers KEC International

KEC International, a global infrastructure EPC major, has secured new orders worth Rs 568 crore in its Transmission and Cables businesses. Under Cables business, the company has secured orders for the supply of Power and Telecom Cables. The total value of orders is Rs 75 crore.

Under Transmission business, the company has secured orders in India, Bangladesh and Americas amounting to Rs 493 crore. In India, the company has secured two orders involving supply and erection of 765 kV and 400 kV transmission lines in the state of Rajasthan and Haryana under the Northern Region System Strengthening Scheme (XXV) on turnkey basis. The orders are secured from the Power Grid Corporation of India (PGCIL) and the total value of orders is Rs 314 crore.

Besides, SAE Towers, the wholly owned subsidiary of the company has secured orders worth Rs 130 crore for supply of lattice towers, monopoles and hardware from United States, Brazil and Mexico. In Bangladesh the order is involving supply and erection of 132 kV transmission lines on turnkey basis. The order is secured from the Power Grid Company of Bangladesh (PGCB) and is valued at Rs 27 crore while in Saudi Arabia, it has secured an additional order from its existing project in the country. The order value is Rs 22 crore.

Crude oil prices mixed in Asian trade

Oil was mixed in Asian trade today as investors focused on the upcoming Senate grilling of prospective Federal Reserve chair Janet Yellen for clues on when the central bank will wind down its easy-money policy, analysts said.

New York’s main contract, West Texas Intermediate (WTI) for December delivery, was down 23 cents to $93.65 a barrel in mid-morning Asian trade, while Brent North Sea crude for December gained three cents to $107.15.

The oil market has been closely following the Fed’s debate on when to scale back its $85-billion-a-month stimulus.

“Global markets are focused on clues on whether the Fed would start tapering before the end of the year,” said Sanjeev Gupta, head of the Asia-Pacific Oil and Gas practice at consultancy firm EY.

The onset of tapering will boost the greenback, making dollar-priced oil more expensive for countries using other currencies.

In remarks prepared for a Senate confirmation hearing today, current US Fed vice-chair Yellen signalled her support for continuing its monetary stimulus programme until the US economy grows more robustly.

“A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases,” she said.

“I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy.”

Her brief remarks prepared for the Senate Banking Committee, which must sign off on her nomination before the entire Senate votes on it, put her squarely in line with the central bank’s current expansive monetary policy.

Meanwhile, Gupta said uncertainty owing to supply disruptions in Libya provided support for Brent, the benchmark for European markets.

A Libyan oil official told AFP last week that production outages related to political protests had reduced output to 250,000 barrels a day, from 1.5 million barrels a day before the protests erupted in July.

Rupee strengthens to 63.25 on Rajan’s statement

The rupee gained 6 paise to 63.25 per dollar in the opening trade against the previous close of 63.31 after the RBI Governor calmed the worried markets on Wednesday by stating that it would not rush to roll back dollar swap window for oil companies.

At 9.36 a.m.,  the domestic unit further strengthened to 63 per dollar.

On Wednesday, the domestic unit fell to a more than a two-month low of 63.88 against the American dollar in its opening trade citing heavy dollar demand from oil companies and banks.

RBI Governor, Raghuram Rajan, who called a sudden press conference on Wednesday, informed that the central bank has now routed back majority of the dollar demand from oil companies to the market.

After rupee sharply depreciated in July and August, RBI decided to supply dollar to oil companies to meet their dollar requirements. This helped bring appreciation in the domestic unit.

However, the currency market had started panicking after a Finance Ministry official confirmed last week that about 30-40 per cent of oil companies were buying dollar in the market. Since then, the rupee has declined to over two-month low.

Rajan’s statement that the central bank will not rush the process of withdrawing the dollar swap window and that there were various options for the oil companies to repay dollar to the central bank boosted the rupee sentiment. Further, amid FII heavy outflows, the RBI chief said India can still break even on capital flows, which in turn boosted the rupee sentiment.

In addition, in response to the much-talked about reports of US beginning to withdraw its fiscal stimulus earlier than expected, Rajan said India is better prepared to face the tapering now.

Call rates, G-secs

The overnight call money rate, the rate at which banks borrow short-term funds from each other, opened higher at 8.80 per cent from the previous close of 8.60 per cent.

The Rajan effect also helped the bond markets. Yields on the 10-year benchmark 7.16 per cent 2023 government remained flat from the previous close of 8.91 per cent. Bond prices opened a tad stronger at Rs 88.9 from Rs 88.88.

Markets surge on firm global cues, financials lead

Financial stocks are leading the gains after RBI comments on the weakening rupee

Benchmark share indices opened 1% higher on Thursday amid firm Asian cues and overnight gains on Wall Street after the Dow and S&P ended at new closing highs. The appreciation in the rupee against the US dollar also boosted sentiment in early trades.

At 9:35AM, the 30-share Sensex was up 284 points or 1.4% at 20,479 and the 50-share Nifty was up 86 points or 1.4% at 6,076

Asian equities were trading higher on Thursday tracking gains on Wall Street. The Nikkei

surged nearly 3% on comments from Federal Reserve Vice Chair Janet Yellen and better than expected GDP growth in the third quarter. The Nikkei was up 2.6%, while Shanghai Composite was up 0.5%. Hang Seng and Straits Times were both up 0.8% each.

The Dow Jones and S&P 500 ended at new closing highs on Wednesday on the back of better-than-expected corporate earnings and on hopes that the US Fed will continue with its monetary stimulus measures.

The Dow Jones industrial average ended up 71 points, or 0.4%, to end at 15,821.63. The Standard & Poor's 500 Index gained 14 points, or 0.8% at 1,782. The tech ladenNasdaq Composite Index ended up 46 points or 1.2% at 3,965.58.

Key European shares extended losses to end lower on Wednesday as investors turned cautious on concerns that central banks would start winding down their easy monetary policies. The CAC-40 ended 24 points lower at 4,239.94, the DAX dropped 22 points to end at 9,054.83, while the FTSE-100 ended 97 points lower at 6,630.

Rate sensitive sectors were among the top gainers among the sectoral indices on the BSE with Bankex up 2.7% followed by Realty, Capital Goods and Auto indices.

Bank shares firmed up after RBI governor Raghuram Rajan on Wednesday stepped in to steady frayed nerves and said there were no fundamental reasons for weakening of the rupee.

In the banking pack, ICICI Bank was up 3.7%, HDFC Bank surged 1.7%, and HDFC was up 1.8%.

Index heavyweights Reliance Ind and ITC were up over 1% each.

Other gainers in the Sensex include, Tata Motors, L&T and Infosys among others.

Sun Pharma was up 0.8% after results for the September quarter were way ahead of Street estimates. Net sales at Rs 4,192 crore marked a growth of 58 per cent over the same quarter last year. This was above Bloomberg's estimates of Rs 3,768 crore. The pharma major has also upped its sales growth guidance for FY14.

In the broader market, the BSE Mid-cap and Small-cap indices were up 1% each.

Market breadth was positive with 765 gainers and 191 losers on the BSE.

Nikkei jumps to 3-week high, Japan GDP tops market

Supported by dovish comments from Federal Reserve Vice Chair Janet Yellen

The Nikkei share average raced to a three-week high on Thursday morning, supported by dovish comments from Federal Reserve Vice Chair Janet Yellen and data showing the Japanese economy notched up its fourth straight quarter of growth.

Yellen, who is expected to take over Fed Chairman Ben Bernanke, said the Fed has "more work to do" to help the economy, suggesting she will be in no hurry to taper the central bank's massive bond-buying stimulus.

The benchmark Nikkei rose 1.3% to 14,748.99 in mid-morning trade, its highest level since October 23, after easing 0.2% on Wednesday.

The broader Topix advanced 0.7% to 1,212.08 in moderate trade, with volume at 39.3% of its full daily average for the past 90 trading days.

"We're in the best possible situation we could be. Risk-on mode is back," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management. "Although the business sentiment was improving in the United States, it seems like tapering is not on the Fed's immediate to-do list."

Stocks were also helped by data showing Japan's economic growth in the third quarter beat market expectations. Growth of 0.5% in the July-September quarter topped market expectations of 0.4%, marking the fourth successive quarter of expansion - the best run for the world's third-largest economy in three years.

"I think there is relief in response to the GDP headline number which was stronger than people were bracing for," said Stefan Worrall, director of equity cash sales at Credit Suisse in Tokyo.

"As US stocks continue to rally to new highs, and the yen has weakened again to the levels near 100 yen, there's a significant positive risk of a resumption of the Japan rally."

The US Dow and the S&P 500 ended at record highs on Wednesday as strong results from Macy's buoyed the market.

Heavyweight stocks in the Nikkei index led the charge.

"Buying is led by hedge funds buying Nikkei futures, rather than real money investors. That in turn prompted arbitrage players to buy Nikkei and sell broader Topix, thus boosting Nikkei heavyweights," said Norihiro Fujito, a senior investment strategist at Mitsubishi UFJ Morgan Stanley Securities.

Fast Retailing Co Ltd and Fanuc Corp climbed 3.5% and 2.4%, respectively.

Fujito believes Japanese institutional investors are likely to take profits near strong resistance around 14,800, possibly limiting the broader market gain in the near-term.

Automakers bucked the market as the dollar slid to 99.39 yen from a two-month peak of 99.80 yen set just few days ago. A strong yen undermines Japanese exporters' competitiveness abroad as well as profits when repatriated.

Toyota Motor Corp fell 0.5% and was the fourth-most traded stock by turnover on the main board. Honda Motor Co Ltd shed 0.8% and Mazda Motor Corp retreated 0.2%.

The benchmark Nikkei is up 42% this year, supported by the Japanese government's aggressive monetary and fiscal stimulus steps to revive the long-stagnant economy.